India will produce 50 unicorns in D2C space in next 5-7 years

D2C brands are disrupting the traditional retail sector with many becoming unicorns in the recent past. How do you see this space evolving in India? Will these brands be able to give tough competition to established big boys of the retail industry?

If you see last two hundred years, we are still stuck in the hangover of our colonial past. Most of the common brands having dominant market position in the world promote sickness. Many of their products (of these global FMCG brands) are detrimental to the environment or harmful for health. These companies have gone after mass market by exploiting natural resources and created products that are just appealing and tasty like too much sugar. Now, these brands have started to become torchbearers of sustainability and healthy products, which the world is not willing to believe.

Usually, a consumption shift happens every 10-20 years in the world. We have already seen that is happening with more than three unicorns coming in the D2C (Direct to Consumer) space. I do foresee another 10 unicorns in the D2C space in India within the next two years and 50 unicorns in the next 5-7 years. Just like the IT revolution in the 2000's when many companies had emerged and around 10 decacorns have emerged from this space.

Right now, D2C revolution is happening in India and there is a likelihood that 5-10 decacorns will emerge from this space. Most importantly, consumption shift is happening in the last 10 years. Instead of buying normal salt, people are buying Himalayan Pink Salt which is 10 times more expensive than normal salt. Similarly, in case of oil, people are buying cold pressed oil or olive oil which is healthier than other edible oil. People are even shifting from normal Coca Cola to diet Coke. That is the reason that these MNCs are compelled to release products which are less unhealthy (than previous ones).

How Supercluster Pi as a D2C brand is planning to bring in change in retail sector? Can you throw some light into this aspect?

We at Supercluster have found more than several thousands of founders who have the ability to produce the best-in-class products. But they don't know how to market them. Because I came from digital marketing background having spent 15 years running a digital marketing company, I think we are rightly poised to acquire these brands and provide them a platform where we can skill them, giving them a brand identity, taking those brands to every household and making those as global brands.

We operate in health and wellness brands and integrate these products. There are four important criteria we look at before taking a brand under our fold. Firstly, we look at whether we can make it a D2C brand, and secondly whether that particular product can be branded. We also look at whether we can get repeat customers. Once you have repeat customers, you can cross-sale and up sale to those customers. We currently have four brands and the first brand we do have is a hair growth serum.

What is your brand addition plans in coming months?

There are six brands on the pipeline. Currently, we are in the process of raising money. We will be raising around $2 million from investors. As soon as we complete the fund raise, we will close these five-six transactions and those brands will be part of house of brands (HoB). Previously, we had raised around 0.5 million dollar before. After closing this round, we will primarily focus on scaling and activating the brand. Using the leverage of scale, we will bring down our cost of logistics.

What is the revenue run rate of your company as of now? What are your expectations in revenue terms by end of this fiscal year?

After acquiring the six brands that are on the pipeline, we expect our revenue to be around Rs 5 crore monthly run rate by end of this financial year. As far as breakeven is concerned, we will on an investment mode as we will running advertisements, work with influencers and conduct many more such activities for acquiring new customers. We will be leveraging technology to reach out to consumers. Currently, we have around 20,000 consumers. Once we bring in 5-6 brands under our fold, we should be growing fast.

How big is the team now? Will you add headcount after raising this round of funding?

Our whole team is around 100 people. After the fund raise, we will use our existing human resources to acquire new consumers and scaling up the brands. We have enough team members now to manage 15-20 brands now. We will probably hire at the leadership level. We are also taking the help of skilled human resource who are specialists in their subjects but work for us on part-time basis.